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A $80 million AUD luxury development in Point Piper, Sydney, has been handed over to the banks after two of the companies for which property tycoon Michael Bezzina was associated, Caprice Pty Ltd and Pyoanee Pty Ltd, were place in receivership.

Located in Point Piper, Mr Bezzine was expecting to achieve $14 million AUD for the penthouse-style apartments, however, three of the apartments have allegedly exchanged for $10 million AUD each.

The development comprises waterfront apartments, each occupying an entire floor with balconies looking out to the Harbour Bridge and Opera House. They have four bedrooms, four bathrooms and a guestroom, as well as a jetty.

In September, one of Michael Bezzina’s company’s that developed the $100 million AUD Jade complex in Surfers Paradise, was put into liquidation. The company reportedly paid $17 million for the site six years ago, of which six out of the nine apartments have sold, one of which sold for almost $20 million, while the penthouse at the complex remains on the market for $22 million.

It is worth noting that the quality of Bezzina’s developments is outstanding, and his financial troubles should not be allowed to cloud the stunning properties that he has been involved in creating.

Simon Turner

FYI: Read related articles on Sydney Property; or Luxury Homes; or Sydney Harbour

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The US Federal Reserve has set key interest rates to a record low zero to 0.25% in a desperate bid to stimulate the US economy which is looking increaingly sick

Rates are likely to remain this low for quite some time, the Fed stated.

The cut brings the federal funds rate to the lowest level since July 1954.

Wall Street rallied after the announcement, whilst oil dropped 2% to $US44 a barrel

The Fed has also stated that it will expand purchases of debt issued by mortgage agencies to support the housing market in it’s efforts to promote the resumption of sustainable economic growth and to preserve price stability

Simon Turner

More information: The Federal Reserves statement.

How’s this for short-sightedness: The New South Wales Government’s infinite wisdom to increase taxes by $3.6 billion AUD to compensate for their years of inept mismanagement of states coffers will have a huge impact on the property sector at a time when it can least afford it.

NSW Labor Premier Nathan Rees and Treasurer Eric Roozendaal plans to raise $680 million by increasing the land tax rate from 1.6% to 2% for properties over $2.25 million in land value, essentially a 25% increase, which will increase holding costs for land owners, discourage developments and lead to an increase in rental charges.

The flow on from this will lead to further job losses in the property industry, which is already shedding staff at more than one hundred per week.

We argue that this is not the time for tax hikes, but for the government to show some innovative thought, boost confidence and stimulate the economy. Or at least start spending NSW tax payers money wisely. But then again, given the churn of Premiers in the state and thus their lack of accountability, what do they care?

Simon Turner

FYI: Read more articles on the Credit Crunch; or the NSW Government; or Interest Rates

It’s worth imagining what 2009 could bring. I am a not a pessimist but it is worth glaring into the crystal ball and letting go of today and dreaming – dreaming it is December 2009.

Has the US Fed pumped trillions of dollars into the US economy and what has been the result? Have property prices stabilized and how is Citibank going? Has the bailout really cleaned out the poisoned loans? Let’s dream!

We have bailed out the 3 car manufacturers and we have bailed out the banks. The banks have hoarded money and monetary policy is having no effect. Interest rates are at the lowest level ever – 0% and the Dow is hovering around 5000 points. Superannuation has lost trillions and those that would be retiring have realized that another ten years of work is required (at least) to make retirement possible.

Small and medium manufacturers are all but gone – car companies are waiting to get supplies and difficult car finance is all but crippling sales. Many of the smaller car dealerships have closed, finding the credit crunch a hard go and the larger dealerships holding too large an inventory are closing. Surely more money will solve this, but maybe not! With monetary policy crippled what can President Obama do?

The Fed has decided to pump more money into the economy and inflation is now an issue. Inflation is a real problem, with OPEC deciding to reduce supply by a total of 10 million barrels a day to increase the price of oil. Their greed has accelerated issues in the economy with transport companies struggling to get paid by clients, forced redundancies and supply train chaos ensue.

Credit scarcity has caused loan delinquencies to flourish with 5 million US households in foreclosure. Prices continue to fall and Citibank is on a downward spiral. What are the options for President Obama? Let Citibank fail or pump yet more money into the economy? This will force the US dollar to fall even further and prices are going up and up.

The US economy is now at breaking point with reliant economies collapsing. There is no savior to come to the US aid – the world is simply not capable of saving the US as it’s too big. Japan and the EU are crippled. Is the US in recession, depression or bankrupt? With trillions of dollars of debt President Obama has few options.

This chance to imagine is just one example of what could be. There are so many variables and so much left to be answered. This situation would cause so much grief and I am an optimist, hoping and praying that our leaders find solutions to the problems we face. Solutions that are not only needed but vital to the livelihood of so many families and vital to the survival of the world superpower that we so rely on for our economic and military security.

Michael Marquette

FYI: Read more articles on the Credit Crunch; or 2009; or US Economy

The Reserve Bank of Australia (RBA) will meet on Tuesday 2 December and, the Marquette Turner team expect, they will make a fourth consecutive cut to the official interest rate.

A survey of 18 economists by the Australian Associated Press revealed the following:

  • All 18 economists believe the RBA will cut interest rates
  • 11 economists expect the rate to drop by 0.75% (75 basis points) putting interests rates at 4.5% (the lowest since June 2002)
  • 5 economists believe the cut will be 1% (100 basis points) leaving interest rates at 4.25%, the lowest level ever.

Time will tell who wins the bet, but home owners and buyers alike will be the winners of any rate cut.

Simon Turner

FYI: Read related articles on Interest Rates; the Credit Crunch; and the Economy

“Bailout” has been named as the “Word of the Year”, being the word that has been searched the most in online dictionaries and has become suddenly infused into daily language.  “Turmoil” was up there too!

Things may be worse than they were perhaps a year ago, but please take a moment to think of all the good things.  During this Thanksgiving holiday – an American institution that surely everyone throughout the world should recognise – be thankful for what you’ve had, what you are, and what you can be.

One of the phrases Marquette Turner has coined is “Luxury is…” – this week we share with you some comments people have shared with us.

Please enjoy the stories in our blog, or you can go straight to the e-magazine.  We thank you!

Michael Marquette & Simon Turner

“As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.” John Fitzgerald Kennedy

Whatever level of real estate, at whatever price, there are still numerous stories of people that, whilst not necessarily “doing it tough” are still struggling to find success in the current real estate market.

The world’s greatest ever tennis player, Pete Sampras (based on Grand Slam titles I must add, before I get heaps of corrections!), recently sold his 10,000 square foot mansion in Beverly Hills, California for $2 million USD less than the $25 million USD he was looking for when he put it on the market in January 2008, having paid $8.3 million USD for the six bedroom property in December 2001.

For those interested, the property has six bedrooms, 12 bathrooms as well as its own guest house, gym, tennis court, and theater.

Simon Turner

FYI: Read related articles on Homes of the Rich & Famous; Luxury Homes; Credit Crunch

With both the United States’ Senate and House of Representatives having approved the $700 billion bailout of the US economy, and President George W Bush having signed the act into law quicker than you could blink, now begins the blame game to see how this crisis snuck up upon so many.

I, however, thought I’d first look at the scale of the figure and try to put it into perspective. From then on, you can judge for yourself this daunting amount.

Here we go:

If you were paid $1 per second, it would take you 22,197 years to amass $700 billion dollars in your piggy bank.

If you took 700 billion steps, you would stop walking in 10,318 years.

It is the combined Gross Domestic Product (GDP) of Thailand and Belgium, according to the International Monetary Fund’s (IMF) 2007 accounts.

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20 under-five year olds die every minute in the world from preventable diseases, which is 30,000 per day when the vaccinations to save them cost less than $1 (I invite you to read our article on Kiva to find out how you can help save lives, one loan at a time).

Apple has sold 150 million iPods: this is 550 million too few for 700 billion songs.

How many ways can you put the gravity of $700 billion in perspective?

Simon Turner

FYI: You can also read this article as a press release

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